Rising imports bring Brazil’s Processing Industry to record deficit

Even with shipments leaving the Brazilian shore in comparatively higher numbers, the increase in imports, mainly fertilizer and fuels, should lead the Processing Industry in the country to an end-of-the-year that will be remembered for the highest deficit level since the recession of the Brazilian economy in 2015 and 2016. The assessment above was made by the Institute of Industrial Development (Iedi).

The industry’s deficit reached USD 47.07 billion year-to-date (January to September), according to Iedi data. This was the worst recorded in such a period since 2014 when the deficit stood above USD 50 billion. Last year, up to September, the trade deficit was US$ 37.3 billion.

In terms of technological sophistication, the deficit grew influenced by the purchase of items from the high and medium technological intensity sector, which, from January to September, had their own deficits of US$ 32.04 billion and US$ 63.02 billion, respectively. These figures were also the highest since Iedi began keeping track of it in 1997.

The year’s partial data up to September shows that a deficit in the Processing Industry is already a given in 2022, breaking the record for such a period since the 2015/2016 crisis, says Rafael Cagnin, an economist at Iedi.

The deficit up to the third quarter results from US$ 135.93 billion earned in exports and US$ 183 billion spent in imports.

The expectations for next year are still for a significant deficit in the Processing Industry deficit, with exports slowing down and imports keeping up the pace since fertilizers and fuels should keep coming regardless of the expected drop in demand.

This year, recalls the economist, the deficit expanded despite the reopening of exports from important sectors, such as the automotive sector, the good performance of the metallurgy and food sectors, and the growth of the pharmaceutical industry. Imports, he explains, increased rapidly as a result of their prices and the increased intake of fertilizers and fuel.

The industry branches that imported the most were the chemical industry (except pharmaceuticals) and the oil derivative industry, which were responsible for 70% of the increase in imports by the Processing Industry from January to September this year compared to the same period last year.

In the same comparison period, the sector’s exports increased by 29.9%, with a 26.6% increase over the same months in 2021. Under the same criteria, the increase in imports this year was 28.9% on a 34.7% increase.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/brasil/noticia/2022/12/16/importacao-em-alta-leva-industria-a-deficit-recorde-em-2022.ghtml

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